If you’re thinking about adding a feature which allows you to engage with customers via your website, app or other program, you might be wondering—is it live chat, or a chatbot that I need? How does each option work, and which is the best option for me?

These are good questions because the terms are often used interchangeably. In short, chatbots are all about automations and do not require a human agent to manage each conversation. 

Live chat, on the other hand, is simply the ability to chat to someone via text in real-time, and will always involve talking to a real person. 

Both options feel similar to a user. They can type questions into a box and expect quick answers, but implementation in each case is very different. In this blog, we’ll summarize what each option is and reasons to choose one option over the other.

What is live chat?

Live chat refers to the ability to start text-based conversations in real time. 

Live chat is a very widely used tool for customer support, with the large majority of customers not just preferring but expecting live chat features to be part of the buying experience. Most of us are aware of and use live chat features every day—while browsing ecommerce sites or looking for quick answers to questions we can’t find in other resources like FAQs.

Is live chat a real person?

Yes. While a live chat platform might use some kinds of automation, for example in assigning agents or managing threads, live chat conversations are always between a customer or user and a human agent, who typically is working in customer support or sales.

What are chatbots?

Chatbots are computer programs that mimic conversations with real people. The interface usually looks the same as live chat—hence why they’re often thought of as being the same. 

Some chatbots use very simple logic to operate, only needing to understand yes or no answers to take users to new destinations. 

By contrast, more advanced chatbots use artificial intelligence and machine learning to understand natural language and complex questions and phrases, so that conversations with them feel like talking to a real person.

Why use live chat rather than a chatbot?

Using live chat can quickly become an important tool for sales or customer support teams who aren't using communication methods that allow for instant responses. You can usually set up and add a live chat function to your website and have it running in minutes, although using it effectively will be trickier.

Let's say you have a contact form on your website, and leads are currently being managed by a CRM system. Inquiries have to pass through several hands before being actioned. This means uneven response times, and on this the evidence is clear: response times are central when it comes to getting website visitors to convert.

Adding a live chat function to your website could be used to provide another kind of experience for qualified leads, reducing the amount of time between the first point of contact and a meaningful conversation about your product.

Live chat can also quickly be added to reduce wait times for customer support, adding credibility to your brand and improving customer satisfaction. Common questions can be answered with pre-set text answers, or by sending useful links to resources like FAQs pages.

While live chat does mean an investment of some kind, involving either (1) hiring new live chat agents to manage conversations or (2) shifting the responsibility of existing employees, it clearly can be a valuable tool.

Why use chatbots rather than live chat?

Chatbots might be more difficult to set up, but there is a key issue with live chat that chatbots easily solve—scalability.

Real human agents will usually manage between two and four conversations at a time. As your website traffic grows, you will need more agents to manage these conversations, and quickly this will stop being cost-effective. 

Many people worry about chatbots not being able to provide the "human touch" they think customers are looking for. It's important that interactions with chatbots feel close to human interactions. That being said, if you want to perform simple actions like funnel users to pages away from your homepage or provide useful written content to common questions, it isn't necessary to do this within a complex conversation. In fact, this kind of chatbot usage can be integrated with live chat. Live chat and chatbots are not mutually exclusive.

Problems with availability damage how effective live chat can be—22% of live chat messages go unanswered. Chatbots are available at all hours and can work alongside live chat operators during busy periods.

The concern about the human touch and customer engagement also comes from misconceptions of how well AI chatbots are able to answer questions in different contexts. It isn't an exaggeration to say that chatbots now can and do feel human. For example, 27% of customers don't know whether their last conversation was with a real person or with a bot. It is possible to rely on chatbots for complex requests, without worrying about negative customer experiences.

Live chat vs chatbot: pros and cons

Live chat software

• Easy to set up—you can have live chat installed more or less instantly
• 100% human responses, so can be relied on to solve complex issues
• Provides quick responses to issues
• Can improve sales funnel with leads tackled more quickly
• Can help with customer satisfaction and retention

Chatbots

• No need for live agents, so excellent cost-efficiency
• Efficiently deals with common questions and requests
• Can more easily scale with your business
• Transforms lead generation with real-time sales conversations and enhanced content strategy
• Available 24/7

Start a free trial with Instabot today and learn more about how chatbots have the power to transform your marketing and customer support strategies.